IT gets industry status in J&K

Masood Hussain, TNNJan 27, 2004, 12.40am IST

SRINAGAR: A day after the passage of US federal law preventing outsourcing to India, the J&K government announced industry status to the IT sector. It also decided facilitating creation of a venture capital fund of Rs 25 crore to begin with in association with the financial institutions to meet the equity requirements of the small and medium enterprises and IT start-ups.

Terming it a "landmark policy decision", state chief secretary Dr S S Bloeria said all IT hardware, software and service industries would be entitled to industry status and the state financial institutions and the banks would treat these as priority sectors. Besides, a mechanism for single-window clearance of all IT industries would be set up. The decisions are aimed at "tapping enormous potential of IT in the economic development of the state".

At the same time, the government would introduce IT education in government schools at all levels, with special emphasis at the senior secondary levels. The private schools in the state would also be encouraged to introduce IT education at all levels and specific schemes to provide funds for setting up the required infrastructure in these schools formulated in consultation with the financial institutions.

The twin universities at Jammu and Srinagar and all the state run colleges in the state shall be encouraged to introduce specialized courses in IT, as per the decision. The government would also be provided incentives to take up specialized IT related projects for research and development.

As regard setting up of IT infrastructure, a STP is being setting up at Jammu and Ladakh to offer Internet broadband connectivity. A STP operates from Srinagar for the last three years. An STP for Jammu is inevitable as the upcoming Shri Mata Vaishno Devi University is starting IT as one of the four major thrust areas when it formally starts functioning in July.

Though the decesion came after a few years of crusade by the IT-literate youth, many consider that J&K has already missed the bus. Says Haseeb Drabu, state's economic adviser: "We have already lost the game as for as IT goes. Even if we try, we cannot reach other states in next seven years. We need to explore the alternatives."

Despite the ideal climate suited for IT, an STP, over one lakh computer literate youth — of them 2.5% professionals and more than 30 IT training institutions of all the major players in the market — total exports from Srinagar so far have not crossed even a crore of rupees. STP feeds three software developing units within the premises and two internet service providers in the main city catering to over 3,000 net users other than BSNL. Till recently, J&K IT training institutions were included neither in the technical institutions nor formal education institutions.

"STP was inaugurated in January 2001 at an investment of Rs 10 crore but government took eight years to recognize the fact that there has been over Rs20 crore investment in the private IT sector," says Suhail Wahid Malik, director Informatics. It was his association of the leading IT institutions operating in Kashmir that made J&K to change to work on IT policy.

Mr Malik says they have been demanding quite a few things from the government. "Give IT an industry status, create an IT hub on the pattern of industrial estates that must have uninterrupted power and Internet connectivity", he says. They accuse STPI of failing in judicious distribution of IT projects among all the STPs across the country. The STPI exports have crossed Rs 37,176 crore in 2002-03. The IT professionals in Srinagar had to fight a long battle with their government to prevent the latter from outsourcing its software development projects to concerns outside the state.

An earlier Nasscom study has projected the earnings worth Rs 2,500 crore by 2010 if J&K's full potential is exploited. It was acknowledged by almost everybody from the President APJ Abdul Kalam, Infosys Technologies CEO N R Narayan Murthi to IT minister Arun Shourie during their respective visits to Srinagar, last year. Offering an 11-point prescription to J&K for getting its "due share" from "knowledge economy", Mr Murthi had even promised that his bellwether company will "look at Srinagar" when the company decides about setting up 15th Development Centre.

Though the government has belatedly taken the decision to help the IT sector, the glamour is lost, at least temporarily.